The Rise of SMB Tech: Top 5 Takeaways from TimeToValue Conference Keynote for High Tech Organizations
The Rise of SMB Tech
It comes as no surprise that High Tech organizations are in the midst of unprecedented times, facing a multitude of challenges as they work to keep up with the technology innovation curve. Leaders within the industry must proactively build out robust strategies that keep them ahead of their competitors, enable market agility and penetrations, whilst staying engaged with their customers and staff.
Throughout the two-day TimeToValue Conference, industry-specific and thought leaders weighed in on a number of High Tech sessions to reflect and expand on SMB Tech figures and trends, while forecasting on future insights.
We’ve outlined some key learnings below from the High Tech keynote season, “The Rise of SMB Tech”, which featured a discussion between Jeff Richards, Managing Director at GGV Capital and Tiffany Luck, Vice President at GGV Capital, who provided thoughtful insights quotes, which we’ve highlighted below.
The full session recordings are also available on the TimeToValue Conference website here.
Top 5 ways SMBs are disrupting the status quo
1. A different decade
Over the past 10-15 years, we have seen four major shifts occur, which have ultimately led to the rise of SMB tech. SMBs are in a unique position, as they are being propelled by software and technology providers to continually challenge the industry norm and expand their capabilities.
Cloud: Through a digital transformation to cloud services, SMBs were put in an ideal situation to position their businesses with a strong growth plan. By moving to cloud services, infrastructure costs were significantly reduced, allowing SMBs the opportunity to allocate costs to other key areas of their business.
Mobile: The launch of the iPhone took accessible technology to a whole new level. By introducing these devices into everyone’s hands, SMB owners saw new levels of consumer enablement and engagement, which inspired SMBs to get creative in terms of their product development and services. Innovative thinking from the App Store enabled SMBs to get in front of consumers at their fingertips, while at the same time, tech companies found this as an opportunity to get in front of SMB owners with products that helped them propel their small businesses.
Digital: The emergence of social media and digital marketing allowed SMB owners the opportunity to engage with the right audience and tailor their messaging towards their key consumers.
Payments: Companies like Braintree and Stripe drastically reduced the cost for SMBs to integrate payments into their offerings. This ease of payment saw extremely positive outcomes on overall customer experience and retention. Not only were customers pleased, but SMB Tech companies were fully on board, as this supplemented their revenue streams.
“Putting technology in the hands of everyone...started a wave of technology adoption that sprung from consumer to SMB and into Enterprise.”Tiffany Luck, Vice President at GGV Capital
2. Soaring to new heights
Reflecting back to the start of the decade, it’s impossible not to acknowledge the tremendous growth the industry’s seen. To go from just one public SMB Tech Company in 2010 (Intuit), to 22 public SMB Tech companies now in 2020, the growth trajectory shows that these companies are up an average of 56% in 2020, vs Nasdaq which is up roughly 35% (according to GGV Capital’s SMBTech Index). Even more impressive is that this category has grown from $15B to $55B in this timeframe.
“There’s a lot of opportunity, and we’re really just getting started. This looks really bright for the future.”
— Tiffany Luck, Vice President at GGV Capital
Businesses can no longer be “offline-only.” The adoption of this mentality and the pace at which technology is being adopted in order to adjust, has been hastened dramatically by COVID-19. Throughout this pandemic, SMBs have shown great resilience and have adapted to new global standards very quickly.
3. Checking all the boxes
It became clear that all top SMB Tech companies share a common thread of characteristics which allow them to be successful, topical and ever-evolving. The attributes that allow SMBs to stand out as industry leaders include:
- Strong focus on SMB customer needs vs enterprise client needs
- Knowing what direction to go: Provide an industry-specific solution or a solution focused on a specific need across all industries
- Deep understanding of unit economics and churn: There will always be natural churn. This needs to be accounted for and have either lower cost of acquisition or higher customer retention.
- Being in the payment flow: Supplement recurring SaaS revenue and build and maintain customer retention.
- Creating network effects where possible and building a strong user community. Within SMB Tech there can be a strong sense of a united mission and support of SMBs and local economies.
“Especially at the very early stages of the company, focusing on core SMB customer needs helps build a sustainable business over time.”
— Tiffany Luck, Vice President at GGV Capital
4. Technology saves in tough times
In the wake of COVID-19, we’ve seen how SMBs have used this time to grow their business and expand their services. There’s tremendous optimism towards a brighter future, as SMB owners are embracing the opportunities to launch new products and adapt quickly to our changing climate, due to the ease of technology for the consumer.
GGV Capital conducted a Small Business Survey which showed great promise for SMBs in the year ahead, stating that 83% of owners believe their business will improve in 2021, along with an overwhelming expectation to increase software spending in the next year. It’s also expected to be a strong year for growth and expansion, with 93% of SMBs planning to hire new talent in 2021, as they’ve proven to be in a healthy position with new business activity and fewer bankruptcies than expected.
5. Forecasting a bright future
Throughout the past year, small business owners have proven their resilience and ability to adapt to the new norm that has and continues to evolve. We’ve seen companies shift the way they do business as a result of the pandemic, from remote workforces to technology advancements, which ultimately has allowed them to come out the other side stronger than before.
E-commerce, telemedicine and cloud in general are well positioned to grow and have paved the way for new retail, entertainment and food service concepts to successfully launch in 2021.
New year, new times in tech
The quick rise of SMB Tech has been quite impressive and it’s poised for continued growth heading into 2021.
This past year has shown that SMB Tech solutions have enabled SMB owners to quickly adapt to new ways of doing business and engaging their customers.
In the face of a global pandemic, we’ve learned that SMBs are quite resilient and will continue to lead the way as we enter a new year and post-pandemic period. We can expect them to continue to embrace technologies that will allow them to provide maximum benefit to their customers, while ensuring they’re well-positioned to face the next opportunity, whatever that may be.